Andrew Bolt has a post where he shows some data John Comnenus has assembled. The bottom line is that Labor has spent too much money and the decline in revenue that Swan keeps complaining about isn’t quite true. What the data analysis does in compare forecast budget data from the last Costello budget to the current MYEFO data. What you see when you do that exercise is that revenue has increased and spending has increased. The cause of our current fiscal problems – too much spending. While I like that argument, the data comparison is misleading.
One of the first things the Rudd government did was to change how the budget data was presented. In particular the Treasury would (correctly) treat the GST revenue as a Commonwealth tax and would include it in the budget papers. While that is sensible, it also means that we can’t compare the budgetary performance of the Rudd-Gillard government against the last Costello budget. (Alas – I know this because I’ve tried before). Just to convince everyone I have cut and paste the revenue and expenditure data from the last Costello budget and the recent MYEFO side by side (the table is a bit untidy). The big numbers on the LHS of each box are revenue and the big numbers on the RHS of each box are expenditure. As you can see they are very different in each year.
So it does look like revenue and spending have both rocketed up – supporting the John Comnenus argument. So while he is wrong on the specifics the idea is correct. What can be done is to compare the first Swan budget (before the GFC terrorised the government into spending too much) to subsequent budgets. So what I have done in the tables below is capture revenue and spending data – the first column shows data from the first Swan budget and by moving across to the right we can see what has happened.
So what has happened? Revenue has fallen relative to expectations. Spending has increased. So I agree with the overall position that the government needs to cut spending – we’ve been saying that at the Cat for years – but it isn’t correct to argue the government has had a lot more money to spend relative to expectations.
(Thanks to Noodle for the heads up).
Update: I remember now that we’ve discussed this problem before.
Of course it would be even better to compare the last Howard government MYEFO (October 2007) to the latest MYEFO, but the numbers are not entirely comparable. One of the better Rudd government decisions was to include the GST as a federal government tax and outlay in the Budget papers. So the comparison is not ideal, but a lot of the first Rudd budget would consist of what they’d inherited, so I don’t imagine too much difference between the two (although Rudd did suggest that the reckless spending must stop).